Volvo has a fight on its hands for threatening to terminate dualed dealers in its major markets.
The National Automobile Dealers Association and the New York State Automobile Dealers Association have written letters to Volvo Cars of North America Inc., asking Volvo to reconsider its demand, according to Robert Vancavage, executive vice president of the New York association, which is based in Albany.
Vancavage said half the state's Volvo dealers attended a Jan. 20 meeting in Albany to discuss Volvo's threat. 'Half of them are dualed, and they're all upset,' he said in an interview at the National Automobile Dealers Association convention.
Volvo's position became public in November, when dealer Tom Nemet of Queens, N.Y., complained to the state association and NADA. Nemet owns Nemet Motors, which has Chevrolet, Nissan, Hyundai and Volvo franchises.
'It looks like we have no choice but to litigate,' Nemet said in a recent interview.
Volvo has postponed the deadline for some dealers, but Volvo executives said the demand for exclusive dealerships stands. Eric Chase, a lawyer in Florham Park, N.J., said in an interview at the NADA convention that he represents a California dealer in a similar complaint.
Some dealers are enraged that Volvo is demanding exclusive stores without rewriting its dealer agreement. They also are concerned about the costs involved.
Rival Mercedes-Benz of North America Inc. got its dealers to sign a new dealer agreement - including exclusive stores in big markets - or else forfeit the new M-class sport-utility.
And Saab Cars USA Inc. is asking dealers in new markets to sign a new dealer agreement, including exclusivity. Saab is not using threats against its older, established dealers, said John Orth, Saab vice president of sales and marketing.
Said Chase: 'You can't make such big changes under the existing agreement. These are not small changes.'